Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerEach year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.
Yamana Gold (ASE: AUY) is a favorite speculative pick for 2007 from Curtis Hesler, editor of The Professional Timing Service.
He explains, "I believe that gold made a significant breakout in early December, officially ending the correction begun in May. The correction resulted in a triangle formation with the lows all about $560 and the highs successively lower.
"The last time gold formed a triangle like the recent May to November pattern was in 1979. When prices broke out of the triangle pattern in the fall of 1979, gold went straight from $400 to about $875 by January 1980. We are likely setting up for a similar run now, and the dollar is confirming this.
"A doubling of today's price does not require a stretch of the imagination. The gold-to-oil ratio is currently about 10, but it is rising. If it hits the long term average of 16, gold would be $1,000 with crude at $63. If crude were to go back over $70, and the ratio were 16 the price of gold would be $1,120.
"Yamana has developed into a very nice gold producer. We originally bought it as a junior speculation in 2005 at about $2.90. It is now pushing on $13 and they are no longer all that junior. They expect to produce 1 million ounces of gold by 2008, which puts them more in league with the mid-sized producers.
"Yamana's main focus is in Brazil, and there is, of course, always a political risk associated with foreign companies operating in foreign lands. However, Brazil is better than most. They are friendly to mining, and overall their political climate is stable at this point."
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
